of August 31, 2005 No. 158
About approval of Rules on development of business plans of investment projects
Based on Item 7 of the resolution of Council of Ministers of the Republic of Belarus of August 8, 2005 No. 873 "About forecasts, business plans of development and business plans of investment projects of the commercial organizations" and for the purpose of enhancement of methodology of development of business plans of investment projects, to state bodies the Ministry of Economics of the Republic of Belarus DECIDES: simplifications of requirements to their structure, content and registration in case of representation according to the legislation for consideration
1. Approve the enclosed Rules on development of business plans of investment projects.
Approved by the Resolution of the Ministry of Economics of the Republic of Belarus of August 31, 2005 No. 158
1. These rules establish procedure for creation of business plans of investment projects (further – the business plan), including determine key stages and the sequence of carrying out researches, requirements (including simplified) to structure, content and execution of the business plans submited according to the legislation to republican state body, other organization subordinated to the Government of the Republic of Belarus, regional (The Minsk city) to executive committee, in which subordination (which) is (in structure which system (which) enters) the legal entity initiating and (or) realizing the investment project if such subordination is available, or to competence of which (which) the questions connected with production, performance of works, rendering services belong (further – governing body).
2. For the purposes of these rules the following concepts and determinations are used:
the business plan - the document containing interconnected supplied and the information confirmed with the corresponding researches, reasons, calculations and documents on the developed organization activity tendencies (its potential) and about implementation in the predicted conditions of the investment project (further - the project) at all stages of its lifecycle (pre-investment, investment and operational, in need of liquidating), and financial feasibility of the project, contribution to economy of the organization, the region, industry, the country (influence on indicators of social and economic development of the republic) allowing to make efficiency evaluation;
the pre-investment stage - the period preceding implementation of investments in which the developed tendencies of financial and economic organization activity and its potential come to light is determined the concept of the project, the fundamental information necessary for the development of the preproject documentation, the business plan and other documents required at this stage is created and also their development is carried out;
investment stage - designing of the object created as a result of project implementation, updating, if necessary, the business plan, construction of buildings and constructions, acquisition of the equipment and commissioning of the facility, state registration of creation of real estate object and emergence of the rights to it;
operational stage - functioning of object and its maintenance in competitive condition;
liquidating stage - project completion, liquidation (preservation) of object.
3. At pre-investment stage the customer, the investor and other interested make the final decision on feasibility of project implementation.
4. Forming of the fundamental information necessary for development of the business plan is performed at pre-investment stage by means of:
market researches of sale of goods, products, works, services (further - products) and their segments (with preparation of the marketing report), raw zones, and also determination of balances of production and the consumption allowing to make the final decision on feasibility of production of specific type of products or growth in volumes of its release;
researches on the choice of the technologies and the equipment capable to provide release of competitive products, the analysis of offers from suppliers of the equipment, information on technical characteristics, cost and conditions of its delivery;
studies of alternative options of project implementation and determination optimum of them;
developments in the cases of reasons for investments established by the legislation;
determinations of possible suppliers of the equipment and technologies, and also raw materials, materials and components;
search of investors, determination of the scheme and financing sources of the project;
preparation other supplied and the information necessary for accomplishment of financial and economic and other calculations of the project, risks assessment of its realization.
5. Development of the business plan includes generalization supplied and the information on the project received at pre-investment stage, their refining including by means of carrying out additional researches, negotiations with potential investors, banks, suppliers of the equipment and material resources, consumers of products, accomplishment of the corresponding calculations and implementation of other actions promoting preparation of the objective information on the project.
6. No. 55 is excluded according to the Resolution of the Ministry of Economics of the Republic of Belarus of 25.07.2014
possibilities of attraction by the organization of investments into fixed capital, long-term loans, loans;
feasibility of rendering the organization realizing the project, measures of the state support.
In other cases development of the business plan is performed according to the decision of the head of the organization realizing the project or governing body under which authority is (which part is) the organization.
8. The basis for development of the business plan is the order of the head of the organization by which are determined:
responsible for development of the business plan, reliability of the data used in calculations, informing governing body on the course of development of the business plan, timeliness of entering into the business plan of necessary changes and amendments during the term of its realization;
the mechanism of interaction between structural divisions of the organization in case of development of the business plan, the analysis of the course of its realization and entering into it of necessary changes and amendments;
need of attraction to development of other legal entities, individual entrepreneurs with indication of the basis of their attraction;
cost budget on work and sources of their financing (if necessary);
Creation of working group of number of heads, specialists of the organization with provision of the certain powers promoting preparation of interconnected basic data is recommended.
9. Are part of the business plan:
the title page, content, descriptive part of the business plan which are drawn up on paper in the form of the stitched separate book and identical on content on the electronic medium (on optical disk or flash memory) in the form of the file in the Microsoft Word format;
financial and economic calculations of the project according to tables according to appendix 4 or appendix 5 to these rules which are drawn up on paper in the form of the stitched separate book and identical on content on the electronic medium (on optical disk or flash memory) in the form of the file in the Microsoft Excel format;
copies of the documents confirming basic data according to the business plan which are drawn up on paper in the form of the stitched separate books and identical on content on the electronic medium (on optical disk or flash memory) in the form of the file containing graphical images of paper in the Portable Document Format format.
The business plan, including all settlement and supporting documents, is constituted in Russian or Belarusian. At the same time the documents constituted in other language can join in the business plan if they are followed by certified translation into Russian or Belarusian.
The file specified in paragraph three of part one of this Item with financial and economic calculations of the project shall provide possibility of automatic recalculation by the initiator and governing body of performance indicators of investments in the Microsoft Excel format and the financial and economic organization activity realizing the investment project in case of change of the basic data pledged in the business plan.
10. On the title page names of the project, the organization - the initiator of the project (further - the initiator) are specified, to the attracted organization - developer (further - developer) the business plan, the claiming signatures of their heads, approval date of the business plan, requirement of confidentiality of the document.
If for project implementation rendering measures of the state support is provided, on the title page availability of the approving signature of the head (his deputy) of governing body under which supervision is is necessary (in structure which system enters) the initiator if such subordination of the initiator is available, or within the competence of which the questions connected with production and dates of approval of the business plan are.
11. In content names of the main Sections and subsections of the business plan, its appendices are specified, and also references to pages are given.
12. Descriptive part of the business plan shall consist of the following main Sections:
"Characteristic of the organization and strategy of its development";
"Description of products";
"Analysis of the markets. Marketing strategy";
"The organizational plan";
"The investment plan, financing sources";
"Forecasting of financial and economic activities";
"Project performance indicators";
"The legal plan".
Reasons for the expected changes in organization activity in case of project implementation, and also the predicted basic data are given in all Sections of the business plan.
13. By results of calculations of the business plan in case of representation to potential investors, governing body on its request, other interested with the consent of the initiator of the summarized information on the project it is drawn up: the passport of the investment project - when carrying out calculations in full; the investment offer - when carrying out calculations according to the simplified requirements.
The main information on the organization is reflected in the passport of the organization which joins in the Section of the business plan "Characteristic of the Organization and Strategy of Its Development".
The investment offer, the passport of the investment project and the passport of the organization are drawn up according to appendix 1 to these rules.
By preparation of the business plan with participation of developer information on him is reflected in the Section "Information about the Developer of the Business Plan" which joins after the Section "Legal Plan".
14. General requirements to development of the business plan:
the business plan is constituted taking into account features of implementation of types of economic activity and specifics of current (operating room), investing and financial activities of the organization and (or) the project;
in case of project implementation in operational entity financial and economic calculations are performed in two options: taking into account project implementation and without project implementation;
during creation in operational entity of the production facility which is not connected with functioning of the existing production and which is not forming commodity material flows with it in case of operation which can be allocated in independent structural division, including with the right of formation of legal entity development of the business plan it is performed in the following options: separately on the project and on the organization taking into account project implementation;
each Section is created based on the reliable and comparable basic data (taking into account changes of the legislation, accounting policy and structural transformations of the organization and other changes) confirmed with researches and which are drawn up by the relevant documents;
in full calculations of the business plan are carried out according to tables according to appendix 4 to these rules.
Separate calculation tables if necessary can be added with lines (columns), and names of indicators are specified taking into account specifics of organization activity and (or) the project.
For drafts of regional, industry import substitution programs, projects realized by the organizations located in the territory of radioactive pollution (except for the projects which are subject according to the legislation to the state complex examination), the projects providing rendering measures of the state support worth up to 1 million US dollars and the projects which are not providing rendering measures of the state support irrespective of their cost calculations of the business plan can be made according to the simplified requirements according to tables according to appendix 5 to these rules with observance of general requirements, the principles and approaches to development of the business plans established by these rules.
By preparation of basic data of the business plan the following documents are used:
annual accounting records of the initiator for 2-4 years, preceding the planned year of the beginning of project implementation (for the initiators created less than for 2 years, preceding the planned year of the beginning of project implementation – for the period activities), and also accounting records for current period, other reports and the reporting of the initiator;
reasons for investments (if its development is required according to the legislation), other documents confirming the settlement or estimated cost of construction including the conclusions (in case of their availability) state examination of the project documentation;
agreements (draft agreements), in case of their availability, on supply of equipment;
loan agreements (their projects) or other documents (conclusions) of loan providers (creditors), foreign creditors, confirmatory intentions and conditions of loan granting (loans) for project implementation;
constituent documents of the initiator;
reports on results of marketing and other researches;
other documents confirming basic data.
15. The basic and output data pledged in the business plan shall be identical at all stages of its consideration in governing bodies. At the same time separate Sections of the business plan can be supplemented with calculations, reasons upon the demand of participants of consideration of the project (conducting its examination, approval or assessment).
16. In case of development of the business plan the following principles and approaches are applied:
in case of accomplishment of financial and economic calculations of the business plan the methods of simulation modeling and discounting allowing to estimate influence of change of initial parameters of the project on its efficiency and feasibility are applied;
the reasoned reasons on all basic data used in financial and economic calculations of the business plan are given (including on production volumes and sales of products, the predicted prices for products and material resources, investment costs and financing sources, depreciation policy);
in case of creation of the tables attached to the business plan for the base year the last accounting year is accepted;
in case of the solution of question of new construction the alternative calculations and reasons for possible placement of production which are carried out within reasons for investments are considered;
for the projects realized with participation of means or provision of preferences of the state calculations of taxes, charges and payments in the budget and off-budget funds without provision of privileges are carried out and by provision of privileges, and also the loss of income of the state and payback periods of the state support;
the business plan is constituted on all project deadline (further – the calculation horizon). As a rule, the horizon of calculation shall cover the weighted average normative service life of the capital processing equipment planned to acquisition within project implementation and also the period from the moment of initial attachment of investments on the project before input of designed project in operation. If the term of return of borrowed funds is equal or exceeds the period from initial attachment of investments on the project before the termination of the weighted average normative service life of the capital processing equipment planned to acquisition within project implementation, the horizon of calculation is established for the term of return of borrowed funds plus 1 year. Establishment of other reasonable horizon of calculation is allowed;
the step of display of information in the tables represented to governing bodies is accepted to equal 1 year;
payment of the business plan under the project for which implementation means in freely convertible currency are required is given in freely convertible currency, in other cases – in freely convertible currency (as a rule, in US dollars) or Belarusian rubles (in current prices without inflation).
Calculation of the weighted average normative service life of the capital processing equipment is perfromed on formula
where Ci - the cost of i-go of type of the capital processing equipment;
Hi - normative service life of i-go of type of the capital processing equipment;
With - total cost of the capital processing equipment;
I - quantity of types of the capital processing equipment.
17. The summary reflects the main idea of the project and generalizes the main conclusions and results on Sections of the business plan. Its content shall state business plan essence in the compressed and available form. It is reasonable to provide information on technology novelty of the project (in the presence), its social importance. Summary indicators on the project (separate basic data, output indicators of cost efficiency of the project) are drawn up according to the table given in appendix 2 to these rules. This table is included this Section.
18. The Section "Summary" is constituted at the final stage of development of the business plan when there is complete clarity according to all other Sections. Regular amount of the summary (except the table) - 2-3 pages.
19. In this Section the general description of section (class, subclass) in which the organization performs the activities is given.
Information on contribution of the organization to creation of value added of main types of economic activity is provided.
In case of the description of the organization the following questions are reflected:
short history of creation;
short characteristic of production economic activity (including its strong and weaknesses, seasonal nature of sales of products, serial or small-scale nature of production);
available capacities on production, their loading, the short characteristic of the available technologies, fixed assets with allocation of their active part, compliance to the level of technologies and the equipment of the leading global manufacturers;
objects of the social sphere in infrastructure of the organization, share of their cost in the cost of fixed assets;
data on the rights to the available fixed assets (the property rights, economic conducting, operational management, lease, finance lease (leasing), about availability of the parcel of land and the rights to it;
information on certification of productions according to the international requirements;
(implemented) organization implementable other projects, sources of their financing, assessment of achievement of the established (expected) indicators;
the short analysis of financial and economic organization activity in three years previous planned and also for current period;
the main indicators of financial and economic organization activity for preceding period according to the table according to appendix 3 to these rules;
the factors which are negatively influencing results of financial and economic organization activity.
20. In case of the description of the development strategy of the organization the following questions reveal:
main goals and tasks of perspective development, direction of increase in innovative activity (release of new products, improvement of quality of products, production growth in volumes, improvement of working conditions, economy of resources, replacement of fixed assets, implementation of new and high technologies, import substitution, other purposes and directions);
relevance and novelty of the project, planned to production, interrelation with the existing priorities of development of economy of the Republic of Belarus, including participation in the state and interstate programs;
the list of the main objects included in the project, capacities of the created (reconstructed) productions;
the place of implementation of the project, placement of the created production (on the areas of the equipment taken out of service, on the existing free squares, in the new factory building);
reasons for possibility of creation of competitive production in operational entity taking into account its financial condition, the located potential and personnel production, the available infrastructure, loading of capacities and management structure;
reasons for need for the additional production capacities necessary for accomplishment of the production program on perspective, method of their creation (construction, purchase, lease);
need of stop of the operating production (certain sites) for reconstruction;
the list and reasons for the required equipment and the technologies taking into account the reached scientific and technological level, requirements of international standards of quality and reliability and also planned to release of volumes of production and its consumer characteristics;
the reasons for the choice of the equipment based on comparative technical characteristics of the equipment of the leading producers and conditions of its delivery, conditions of after-sale service, guarantees and the prices;
reasons for amount of the investment costs necessary for preparation and production organization;
information on availability of the preproject (pre-investment) and project documentation, the conclusions of state examination of the project documentation, on carrying out (carrying out intention) the biddings, on the available agreements (their projects) on supply of equipment, about conditions and about terms of its delivery, installation and adjustment;
ecological project evaluation (the analysis of impact of future production on the environment, amounts of waste, expected places of their utilization, conversion and other ecological aspects);
actions for goal achievement of the development strategy of the organization, intentions (action plan) on implementation of modern information systems and technologies.
In case of new construction the description of the specific place of project implementation taking into account geographical location, the existing social and engineering and communication infrastructure is provided (availability of manpower, roads, engineering communications, communications, energy carriers and other infrastructure). For the purposes of confirmation of justification of the made decisions at pre-investment stage in the cases established by the legislation the reasons for investments which are one of basic documents based on which for the purpose of, the these rules determined by Item 7, development of the business plan is performed are developed.
21. Information on products which will be made by the organization is provided in this Section:
main characteristics (consumer, functional, other product characteristics);
compliance to the international and national quality standards;
ensuring field, guarantee and after-guarantee service;
availability of patents, licenses, certificates;
novelty of technical and technology solutions, consumer properties.
22. The actions plan on product improvement for the purpose of increase in its competitiveness in which it is necessary to reflect the following questions is provided:
large expected problems in development of products and approaches to their decision;
reasons for offers on development of new types (modifications) of products, packaging enhancement;
intentions and offers on bringing product quality to the international requirements and its certification.
23. In this Section the key moments of reasons for sales volumes of products based on the analysis of the markets and strategy development of marketing are stated.
24. The analysis of the markets shall include:
general characteristic of the markets in which sales of products of the organization are planned, including planned to release within the project, assessment of their reservoir, including free;
share of the organization in the different markets;
dynamics of market development for the last 3-5 years and the forecast of tendencies of their change during the calculation horizon;
the major factors influencing change of the markets;
assessment of opportunities of competitors and specification on products which are turned out by them - technological level, the price, the quality level;
technology and financial condition of the competing organizations and extent of their influence on the market of these products;
assessment of novelty and product competitiveness, including on price factor, quality characteristics and other parameters, benefits of the organization before competitors.
25. Reasons for marketing strategy are given in separate subsection in which are reflected:
strategy is sold (aimed at increase in market share, expansion of the existing market, promotion at the new markets and other);
calculation and reasons for the predicted prices for products taking into account market situation and tendencies of its change, and also saturation on the corresponding segment of the market, comparison with the price of competitors;
for products which are going to be sold in the foreign markets in case of reasons for the price privileges, restrictions (quota) and the requirement established by the importing country are considered;
reasons for production volumes and sales of products in the long term on the markets (on their segments), possibilities of its sale with the planned profitability level;
tactics on sales of products on specific segment of the market (own retail chain stores, the trade missions, intermediaries, distributors, different ways of sales of products);
policy on field service (the organization on site, repair shops, the service centers and other types of field service) with indication of costs for the organization of servicing and the income (losses) from such type of activity;
information on availability of agreements (protocols on intention) of delivery of products planned to release within the project;
costs for marketing and advertizing;
the actions plan on promotion of products on the markets, including on integration into the created (created) logistic systems, including the main stages of its realization.
The generalized results of the marketing analysis which is carried out taking into account specifics of economic activity of the organization and the project are given according to tables 6-1, 6-2 and 6-3 of appendix 6 to these rules.
26. The production plan is developed on project deadline (the calculation horizon). This Section shall consist of the following subsections:
programs of production and sales of products;
production costs and sales of products.
27. Basic data on the project are drawn up according to table 4-1 of appendix 4 to these rules.
28. The predicted prices for products are given according to table 4-2 of appendix 4 to these rules.
29. The program of production and sales of products is constituted based on the conducted marketing researches, the predicted prices for products taking into account the available and created production capacities and drawn up according to tables 4-3, 4-4 of appendix 4 to these rules.
30. In the subsection "Material logistics" of production perspectives of providing the project with required raw materials, materials, components, spare parts, fuel and energy and other resources are stated.
Are brought in this subsection:
list of the most significant types of raw material resources, and also their suppliers for organization;
frequency of acquisition of main types of raw materials and materials (monthly, seasonally, compliance to quality characteristics is chaotic or with other frequency);
requirements of suppliers for payment method;
reasons and calculation of need for raw material resources, their economy in comparison with the operating technology;
reasons for the scheme of material logistics (modes of transport, funds of loading, unloading and warehousing, cost optimization for transportation of resources);
reasons and calculation of need for fuel and energy resources, their economy in comparison with the operating technology (with indication of the actual consumption rates of fuel and energy resources and progressive consumption rates of the fuel and energy resources by types of products established by the legislation);
reasons for the prices (rates) for material resources proceeding from the developed tendencies of growth (fall) of the prices in previous periods and the expected changes in the long term on the basis of expert evaluations, data of information marketing systems, other researches;
assessment of decrease in import capacity of production;
risks of resource providing.
Reasons for economy (growth) for costs for raw materials, materials and fuel and energy resources shall be made by comparison in base period (year) and after commissioning of the facility:
price calculations of products;
specific weight of raw materials and materials, fuel and energy resources in production costs and sales of products;
the cost level on raw materials and materials, fuel and energy resources to sales proceeds;
amounts of use of local types of fuel, including nonconventional both renewable energy resources and secondary energy resources.
31. In subsection "Production costs and sales of products" reasons on each cost element on production and sales of products are given, their changes in the long term are predicted.
Calculation of need for manpower and expenses on compensation of workers is drawn up according to table 4-7 of appendix 4 to these rules.
Calculation of the depreciation charges is made according to the depreciation policy applied by the organization and drawn up according to table 4-8 of appendix 4 to these rules.
32. Summary calculation of production costs and sales of products it is drawn up according to table 4-9 of appendix 4 to these rules. For breakeven analysis conditional and variables and conditional fixed expenses (costs) are allocated.
By preparation of this table individual clauses and cost elements in relation to total costs on production and sales of products are analyzed and those from them which have the greatest specific weight are determined. Measures for cost reduction and management of product cost are developed.
Calculation of production costs and sales of products it can also be performed under Articles and cost elements taking into account features of types of economic activity of the organization.
33. In this Section according to the main stages of project implementation complex reasons for organizational actions are given.
34. Reasons for the number of staff of the organization, quantity of the newly created and modernized workplaces, including high-productive, with their allocation within project implementation, the choice of rational production management system, personnel, supply, sale and the organization in general are separately given. At the same time possibilities of initiators of the project on matching and training of personnel, capability of team of managers to implement this project are specified, necessary qualification and number of specialists are determined, introduction of multiworking in shifts is proved in work.
35. Total investment costs are determined as the amount of investments into fixed capital (capital expenditure) including tax for value added (further – the VAT) and costs under surplus of net working capital. Investments into fixed capital represent the resources required for construction, reconstruction, acquisition and installation of equipment, implementation of other preproduction actions, and the surplus of net working capital corresponds to the additional resources necessary for their operation.
The amount of investments into fixed capital joins also capital expenditure for replacement of the disposed equipment (during the calculation horizon) which is acquired within the project.
The amount of investments into fixed capital excluding VAT determines project cost by the project.
Calculation of need for investments for each cost type is given in this Section, at the same time the first year of project implementation needs to be reflected quarterly.
When planning total investment costs the need for net working capital during the first period (year) of project implementation and (or) its subsequent surplus separately is calculated, structural changes in production which can arise on operational project stage are considered.
Calculation of need for net working capital is carried out according to table 4-10 of appendix 4 to these rules. At the same time the size of current assets is determined proceeding from the developed level of security of the organization by current assets, the planned changes of the production program, and also opportunities of ensuring their optimum size. The size of accounts payable is regulated taking into account the accumulative balance in cash and level of solvency of the organization controlled in case of creation of calculations for coefficient of current liquidity. If coefficients of current liquidity accept values less normative, accumulative balance in cash (except the minimum balance in cash on the settlement account of the organization) shall be used on reduction of accounts payable and return of short-term and long-term loans (loans).
Calculation of number of days of inventory (current and insurance) on the corresponding element of current assets, and also days of payment deferral (advance payment) when settlings with creditors and debtors for the beginning (end) of base period (year) (DBE) is performed on formula
where ZBE - the inventory amount (current and insurance) the corresponding element of current assets, and also deferred payments (advance payment) when settlings with creditors and debtors (further - value of element of current assets and obligations) for the beginning (end) of base period (year) from the balance sheet of the organization for the analyzed periods;
SDRE - the amount of the income (proceeds from sales of products), expenses of the organization (production costs and sales of products, on raw materials and materials, expenses on compensation, the taxes and fees paid to the budget, other components of costs) for the period (year) used when calculating values of elements of current assets and obligations.
Calculation of the one-day amount of the income (expenses) of the organization on the beginning (end) of base period (year), at the end of the period (years) of project implementation (SOE) is performed on formula
The number of days of inventory (current and insurance) when settlings with creditors and debtors at the end of the period (year) of project implementation (DRE) is ekspertno determined by the corresponding element of current assets, days of payment deferral (advance payment), by the analysis of indicator of DBE and features of material logistics of the organization in case of project implementation (taking into account changes in structure of production, frequency and purchasing amounts of raw materials and materials and other factors).
At the same time detailed reasons for approaches in case of DRE measure definition are given, and also values of elements of the current assets and obligations calculated ekspertno or by other techniques.
Calculation of values of elements of current assets and obligations at the end of the period (year) of project implementation (ZRE) using indicator of DRE is performed on formula
Calculation of need for net working capital can be perfromed on the basis of other reasonable technique.
36. Aggregated data on investment costs and sources of their financing on the project (own, loan and raised funds, including the state participation) are presented in the form of table 4-11 of appendix 4 to these rules.
Reasons for financing sources of the project are given.
On sources of own means of the organization (net profit, depreciation, other own financial resources) the reasons supported with calculations are given. The most acceptable is the share of own means, components at least 25-30% of the required amount of financing.
As financing sources of the project also additional share issue, the credits of banks, target loans and other sources which are not prohibited by the legislation of the Republic of Belarus can be considered.
Copies of supporting documents (the letter, the conclusion, the statement from decisions) about intentions (decisions) of banks, potential investors and other interested on investment of capital in project implementation in the presence of such decisions or intentions are represented.
In the absence of the decision of bank on loan granting in the business plan the planned conditions of use of long-term loans determined proceeding from the general terms of crediting which developed at the time of development of the business plan are specified.
By types of the state participation in the project the basis of provision of measures of the state support (regulatory legal act, the decision, the order and other administrative document) is specified.
Finance costs on the project (payment for the credits (loans) connected with implementation of capital costs, percent on the credits (loans), payment for guarantee of the government, commission of banks and other payments) and sources of their financing are separately given.
37. On each long-term loan (loan) attracted for project implementation (further - the credit), conditions of its provision and repayment according to table 4-12 of appendix 4 to these rules are specified. Calculation of repayment of long-term obligations for the credit for the periods (years) of project implementation is given according to table 4-13 of appendix 4 to these rules.
For the purpose of determination of current value of the credit calculation effective percentage stavki1 (further - EPS) by reduction (discounting) of future cash flows on this credit to date of its initial provision to the borrower on formula is perfromed
where DPI - the amount of i-go of cash flow on the credit corresponding to the amount of its provision and repayment;
di - date of i-go of cash flow;
d0 - date of initial cash flow, matches with date of loan granting to the borrower;
365 - the number of days in year;
I - quantity of cash flows on the credit.
In case of determination of EPS the following approaches are observed:
cash flows are calculated based on the detail schedule of provision and repayment of the corresponding credit and consider all finance costs;
the multidirectional cash flows connected with provision and loan repayment join in calculation with opposite mathematical characters - respectively "minus" and "plus";
the commissions, charges (payments) on the credit preceding date of provision to his borrower are included the payments made for date of initial cash flow of d0.
Calculation of EPS is obligatory when attracting for financing of the project of the external state loan and (or) the external loan attracted under guarantees of the Government of the Republic of Belarus.
By provision of the state support in compensation type from budget funds of part of interest for using bank loan EPS taking into account provision of the specified state support can be calculated in addition.
The summary calculation of repayment of long-term obligations including repayment of the existing obligations of the organization is given according to table 4-14 of appendix 4 to these rules.
1 Technical calculation of EPS can be perfromed with use of the EPS calculator posted on the official site of the Ministry of Finance of the Republic of Belarus and also in MS-Excel using the ChISTVNDOH (XIRP) function.
37-1. The actions for project implementation approved in time are drawn up in the form of the temporary chart or the network schedule according to the data provided in table 4-22 of appendix 4 to these rules for the beginning of use of investments to exit to design capacity.
In graphics of project implementation are reflected duration of accomplishment of the main stages of works (in months) on each construction object, and also the need for financial resources.
38. Calculation of profit on sales of products is drawn up according to table 4-15 of appendix 4 to these rules. In this table annually formed profit or losses are reflected.
Calculation of taxes, charges and payments is performed according to table 4-16 of appendix 4 to these rules.
39. Cash flow forecasting is made by calculation of inflows and cash outflows from current (operating room), investing and financial activities of the organization for the periods (years) of project implementation. Distribution in time of inflow of means shall be synchronized with its outflow. At the same time the accumulative balance in cash on the periods (years) of project implementation shall be positive (deficit is not allowed). The cash flow is drawn up according to table 4-17 of appendix 4 to these rules.
40. The project balance list contains the main Articles, such as non-current and current assets, long-term and short-term obligations. This sheet is drawn up according to table 4-18 of appendix 4 to these rules. In case of carrying out payment under the project taking into account results of financial and economic organization activity in general the base period (year) of the project balance list is created based on data of the balance sheet of the organization for the corresponding period (year), on the periods (years) of project implementation - taking into account changes in value of the non-current and current assets and sources of their financing connected with project implementation.
41. In process of project implementation financial and economic part of the business plan can be recalculated in case of change of economic situation, inflation, the markets of finished goods, tax environment and other factors for the purpose of the comprehensive analysis of economic and financial performance, and also development and taking measures aimed at providing efficiency of the implementable project.
42. The efficiency evaluation of investments is based on comparison of the expected net income from project implementation for the accepted calculation horizon with the capital invested in it. Calculation of the net cash flow determined as difference between net income by the project and the amount of total investment costs and payments for the credits (loans) connected with implementation of capital costs on the project is the cornerstone of method. Calculation of net cash flow is perfromed according to table 4-19 of appendix 4 to these rules.
Based on net cash flow the main indicators of efficiency evaluation of investments are calculated: the net discounted income, index of profitability (profitability), internal return rate, dynamic payback period.
The discounting coefficient which is used for reduction of future flows and cash outflows for each settlement period (year) of project implementation by initial stage of time is applied to calculation of these indicators. At the same time discounting of cash flows is performed from the moment of initial attachment of investments.
Discounting coefficient in settlement period (year) (Kt)
где Д - ставка дисконтирования (норма дисконта);
t - period (year) of project implementation.
As a rule, the coefficient of discounting is calculated proceeding from the weighted average regulation of discount taking into account capital structure.
The choice of the weighted average regulation of discount (Dsr) for own and loan capital can be determined by formula
where Rsk - interest rate on own means;
SK - share of own means in the total amount of investment costs;
Rzk - loan interest rate;
ZK - credit share in the total amount of investment costs.
The interest rate for own means is accepted at the level not below average cost of financial resources in the capital market.
Acceptance of discount rate at the level of actual rate of percent on long-term currency loans of bank when carrying out payments in freely convertible currency is allowed. In necessary cases the allowance for risk which is added to discount rate for risk-free attachments can be considered.
The net discounted income (further - ChDD) characterizes integral effect of project implementation and is determined as the size received by discounting (in case of permanent discount rate separately for every period (year)) the net cash flow accumulated during the horizon of calculation of the project:
where Pt - net cash flow for the period (year) of t = 1, 2, 3,..., T;
T - calculation horizon. When carrying out payments in Belarusian rubles, attraction of the credits in Belarusian rubles the discount rate is applied without the inflation predicted in the Republic of Belarus;
Д - discount rate.
The formula by calculation of ChDD can be presented in the following form:
where ChDD shows the absolute value of net income brought to the beginning of project implementation and shall have positive value, otherwise the project cannot be considered as effective.
Internal return rate (further - VND) - the integral indicator calculated by finding of discount rate in case of which the cost of future receipts is equal to the cost of investments (ChDD = 0).
VND is determined proceeding from the following ratio:
In case of the income regulation set by the investor on invested funds of investment are justified if VND is equal or exceeds the established indicator. This indicator also characterizes the "margin of safety" of the project which is expressed in difference between VND and discount rate (in percentage terms).
Index of profitability (profitability) (further - IR)
where DI - the discounted cost of total investment costs and payment for the credits (loans) connected with implementation of capital costs on the project for settlement period (the calculation horizon).
Projects are effective under IR more than 1.
The payback period serves for determination of degree of risks of project implementation and liquidity of investments and is calculated from the moment of initial attachment of investments on the project. Differentiate simple payback period and dynamic (discounted). The simple payback period of the project is period of time upon termination of which the net volume of receipts (income) blocks the volume of investment (expenses) into the project, and corresponds to the period in case of which accumulative value of net cash flow changes with negative on positive. Calculation of dynamic payback period of the project is perfromed on the accumulative discounted net cash flow. The dynamic payback period unlike simple considers capital cost and shows real payback period.
43. If the horizon of calculation of the project exceeds dynamic payback period on three and over a year, then for the purposes of project efficiency evaluation calculation of ChDD, IR and VND is performed for the period, equal to dynamic payback period of the project plus one year. In that case this period is accepted to the horizon of calculation of T used in formulas of calculation of ChDD, IR, VND.
44. Calculation of payback of the state support is made according to table 4-20 of appendix 4 to these rules.
Simple and dynamic payback periods of measures of the state support are determined similar to calculations of payback periods of investments.
45. When attracting for project implementation of means in freely convertible currency the balance of cash flows (project valyutookupayemost) in freely convertible currency according to table 4-21 of appendix 4 to these rules is made.
46. Calculation of the predicted liquidity rates, indicators of business activity, capital structure and other indicators is performed on the basis of basic data of tables 4-4, 4-9, 4-14, 4-15, 4-17 and 4-18 of appendix 4 to these rules.
Profitability Level (PL)
where marginal (variable) profit - proceeds from sales of products minus the conditional variable costs and taxes, charges and payments included in revenue.
For ensuring profitability of organization activity the level of profitability shall be no more than 60%.
Coverage ratio of debt (PTDC)
This coefficient is calculated for every year of repayment of long-term obligations for the purpose of assessment of capability of the organization to repay the debt on long-term loans and loans. Value of PTDC shall exceed 1,3.
When calculating this coefficient repayment in full of principal debt and percent on all long-term loans and loans (except for percent on the credits, loans and other finance costs, which belong on expenses on financial activities) attracted with the organization and due for settlement in the corresponding year of project implementation is considered. If the state support in compensation type from budget funds of part of interest for using bank loans and (or) 50% of the amount of interest payments on the external state loans and external loans obtained under guarantees of the Government of the Republic of Belarus is provided to the organization (further – parts of percent on the credits, loans), or the organization applies for rendering such support, when calculating coverage ratio of debt this measure of the state support is considered.
sales (turnover) (Rp)
goods sold (Rrp)
Coefficient of current liquidity (Cliques)
Coefficient of security with own current assets (Braids)
Coefficient of security of obligations with assets (KA)
where obligations - the amount of long-term and short-term obligations.
Admissible value for KA - no more 0,85.
Capitalization ratio (Ksk)
Ksk value shall be less 1, byazatelstvo shall not exceed the equity sizes.
Coefficient of financial independence (autonomy) (Kfn)
Value Kfn shall be at least 0,4-0,6.
Proceeds from sales of products on one worker (Vrab)
Value added on one worker (labor productivity on value added) (Dsrab)
Indicator Dsrab characterizes employees ability of the organization to create the work value added.
Assessment of this indicator is made in comparison with the threshold values of annual value added counting on one average worker on main types of economic activity established by the legislation of the Republic of Belarus.
Ratio of expenses on compensation and value added (Dsfot)
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